Calculate cost or equivalent units, Cost Accounting

Calculate Cost or Equivalent Units

The given work in progress account concerns to the blending department of a company, a soft-drinks company for the month of January in 1999. Raw materials were introduced at the start of the work whereas overheads and labour were incurred during the blending process.

Blending Department: W.I.P Account

Particulars

Shs

Particulars

Sh

Bal b/f = 5,000L (4/5) =

65,000

Completed and transferred out: 29,000L

-

Raw materials added (30,000L)

125,000

Ending W.I.P (2/3) 6,000L

-

Direct Labour

145,000

Factor Overheads

201,000

Additional Information

1. Beginning W.I.P. consists of the given as:

- Raw materials shs.15,000

- Direct Labor shs.20,000

- Factory Overheads shs.30,000.

Required

Calculate cost/equivalent units utilizing as:

Weighted average

FIFO

Weighted Average

Total Physical Units

Materials

Conversion

Completed Transferred Out:

29,000

29,000

29,999

Ending W.I.P

6,000

6,000

4,000

______

______

(2/3 X 6,000)

35,000

35,000

33,000

Process Costs: In beginning Inventory:

15,000

50,000

Current Costs:

125,000

346,000

140,000

396,000

Cost per equivalent Unit:

Shs.140,000

Shs.396,000

35,000

33,000

= Shs.4

Shs.12

Total Cost per equivalent Unit: 4 + 12 = Shs.16

FIFO

Total Physical Units

Materials

Conversion

Beginning W.I.P

5,000

1,000 = (1/5 X 500)

Units started and completed during

The current period

= (2,900 - 5,000)

24,000

24,000

24,000

Ending W.I.P

6,000

6,000

4,000 = (2/3 x 6,000)

35,000

Equivalent Units

30,000

29,000

Current Costs:

125,000

346,000

Cost/Equivalent Units

125,000

346,000

30,000

29,000

Total Cost Per Equivalent Unit:

Shs,16.10

= Shs.4.20

Shs.11.90

* Equivalent Units of 5,000 x (1 - 4/5) = 1,000 units was the work done in the period or duration to complete the beginning W.I.P.

Notice that the previous period or duration costs in the beginning W.I.P or Materials. shs.15,000 and converting - shs.50,000 have been excluded in *